"The valid thru date is a technological issue," says Horne. "When you buy online, you need to give an expiration date. Since open-loop cards run on the same rails as credit cards, all those fields have to be plugged in; it has to have an expiration date."
"The funds on the card never expire," says American Express spokeswoman Marinna Norville. "Valid thru is just to demonstrate the magnetic stripe for the life of the card. Shelf life for the mag stripe is about five years. If you have a card with a past valid thru date, just call and you'll get a new card."
Get in on the CARD ActWhen the Credit CARD Act pertaining to gift cards takes effect Aug. 22, 2010, gift cards cannot expire before five years have elapsed unless clearly disclosed on the card. The dormancy fee is still allowed after 12 consecutive months of inactivity. The new law does allow a one-time "service fee" to be charged.
"National retailers are quite content to sell gift cards without fees," says Sievers, "because it brings shoppers into the stores, and people tend to make purchases that are greater than the gift card value. But the bank cards have to charge fees -- that's how they make their money."
None of the retailers' cards has a service fee. Starbucks charges a $1.50 handling fee for cards purchased online but no fee if the card is bought in the store.
Also, retailers' cards do not expire, which is good for consumers. "Generally, consumers don't like expiration dates -- who likes to be told what to do and when?" says Sievers. "But human procrastination is normal, so an expiration date forces them to use it."
This year, Home Depot joins the list of retailers whose cards can be used online as well as in the store. Only T.J. Maxx/Marshall's and CVS do not allow gift cards to be redeemed online.
The restaurant chain gift cards we surveyed, of course, have to be redeemed in the restaurant. The restaurants all offer gift cards in denominations as low as $10, and Yum! Brands has $5 gift cards for Long John Silver's and Taco Bell -- a little stocking stuffer for your stomach. Pizza Hut cards can be reloaded with additional funds, just as Starbucks' cards can.
Regardless of what type of gift card you receive this holiday, the advice remains the same. "Get 'em and spend 'em," says Horne. "Boxing Day -- the day after Christmas -- people will be lined up to spend their gift cards at youth-oriented merchants, Best Buy. People without resources but 'pressing needs' -- like teenagers -- will be there."
So maybe in the States we should call Dec. 26 "Big Box Day"?
Before you buy or use a gift card, check out the issuers with Bankrate's Exclusive: 2009 Gift Card Study.
This study was conducted the week of Oct. 12, by Bankrate market analyst Heather Kuhn.